Americas Market Update 20 July

Fuel prices have moved in mixed directions, and marine warnings are in place in the Gulf of America.

IMAGE: Brooklyn waterfront with shipping containers and cranes. Getty Images

Changes on the day from Friday to 08.00 CDT (13.00 GMT) today:

• VLSFO prices up in Zona Comun ($57/mt) and Houston ($15/mt), and down in Balboa ($27/mt), Los Angeles ($16/mt) and New York ($2/mt)
• LSMGO prices up in Zona Comun ($45/mt), Houston ($39/mt), Balboa ($24/mt) and Los Angeles ($4/mt), and down in New York ($29/mt)
• HSFO prices up in Los Angeles ($20/mt), and down in New York ($11/mt), Balboa ($7/mt) and Houston ($3/mt)

Los Angeles' Hi5 spread has narrowed to $80/mt today, from Friday's $116/mt, as the port's HSFO and VLSFO prices have moved in opposite directions.

Bunker demand is normal in Los Angeles. Suppliers recommend lead times of 8-10 days across all three conventional grades.

Converse to the general market's upward movement, New York's LSMGO price has dipped. The port's benchmark is trading at premiums of $44/mt to Houston and a discount of $59/mt to Los Angeles.

Marine warnings are currently in effect across parts of the Gulf of America and the Eastern Pacific as the Atlantic hurricane season continues.

The US National Hurricane Center has also issued advisories for Tropical Storms Elida and Fausto.

Brent

The front-month ICE Brent contract has gained by $1.66/bbl on the day from Friday, to trade at $88.23/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has continued to move higher this week as the US and Iran continue to exchange strikes – proving to be “deadly” for both sides, according to market analysts.

More commercial tankers came under attack while transiting the Strait of Hormuz over the weekend, the United Kingdom Maritime Trade Operations (UKMTO) reported.

At least two vessels were hit by unknown projectiles - causing fire and structural damages, the UKMTO reported.

Only two outbound visible oil tankers transited the Strait of Hormuz yesterday, two analysts from ING Bank said, citing LSEG data.

“[Oil] flows are essentially back to where they were before the [US-Iran] Memorandum of Understanding (MoU),” ING Bank’s analysts said.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by seven over the week, to 452 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Gautamee Hazarika and Aparupa Mazumder

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